Integral Diagnostics bolsters clinic presence in QLD with $37.5 million purchase of Exact Radiology

Integral Diagnostics bolsters clinic presence in QLD with $37.5 million purchase of Exact Radiology

Integral Diagnostics CEO and managing director Ian Kadish

Almost three months after buying nine clinics across Southeast Queensland, medical imaging company Integral Diagnostics Limited (ASX: IDX) is continuing to grow its footprint in the region through the $37.5 million acquisition of Exact Radiology.

The all-cash buyout adds a further 11 clinics to the group’s total of 71, the majority of which are in Queensland, followed by Victoria, New Zealand and Western Australia.

Under the agreement, IDX will pay Exact Radiology a further $1.875 million if its clinics meet revenue performance targets in FY22.

“We are delighted to welcome the Exact Radiology doctors and staff to IDX,” Integral Diagnostics CEO and managing director Ian Kadish said.

“This transaction consolidates IDX’s presence in South-East Queensland, from the NSW border in the South to Mackay in the North.

“With our deep clinical expertise, we look forward to working with them to develop the practices to their full potential.”

Founded in 2008, Exact Radiology offers specialised imaging services for women at its clinics in Chapel Hill, Ipswich and Underwood in addition to x-rays and computed technology (CT) scans.

IDX projects Exact Radiology will bring in a revenue of $5.25 million for FY22, excluding adverse impacts from COVID-19 and the recent floods in Southeast Queensland.

Exact Radiology clinic in Gatton, QLD
Exact Radiology clinic in Gatton, QLD

 

The purchase comes nearly three months after IDX agreed to acquire Peloton Radiology for $65.5 million, adding nine clinics from Brisbane to the Sunshine Coast to its portfolio. As part of the deal, IDX paid $59.8 million in cash and covered the remaining 10 per cent in ordinary IDX shares. To fund the buyout, IDX initiated a $90 million rights issue at $3.44 per share, offering investors one new share for every 7.55 already owned.

In its half-year results, the group acknowledged restrictions on elective surgery, staff shortages and reluctance from patients to attend healthcare services due to COVID-19 negatively impacted IDX operations.

As a result, profit fell to $10.2 million, reflecting a drop of 48.7 per cent year-on-year. EBITDA also dipped by 21.9 per cent to $39.5 million.

However, the group also noted that “despite challenges in the operating environment” it delivered revenue growth of $7.4 million (or five per cent) in Australia. The company’s New Zealand division saw revenue decline by 18 per cent to $3.9 million.

IDX has been led by doctor-turned-businessman Kadish for the past five years. Before his current role, he was CEO of Healthcare Australia, Laverty Pathology and previously ASX-listed Pulse Health Group.  

“The Exact Radiology Group doctors are delighted to be joining the Integral Diagnostics group with its strong footprint in Southern Queensland,” said Dr Peter Dunn, Dr Neelash Ratanjee and Dr Manesh Ratanjee of Exact Radiology.

“The Integral Diagnostics business has extensive expertise and clinical services to support the growth of Exact Radiology.”

The acquisition is expected to be completed in early FY23, subject to the satisfaction of customary conditions.

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